Evolution AB: 1 director

A director at Evolution AB bought 99,787 shares at 1,002.143SEK and the significance rating of the trade was 72/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clear...

Evolution (Buy, TP: SEK1800.00) - Strong table games in September

According to our tracker, Evolution’s daily average player count continues to show monthly improvement since early August. In September, the tracker is so far showing +8% MOM driven by double-digit growth in roulette and baccarat. Although boosted by seasonality, we consider the near-term trends a relief and coupled with strong growth in new dedicated Live tables, we see potential upside to our Q3e revenue growth QOQ.

Evolution (Buy, TP: SEK1800.00) - Late-summer player improvement

After low-season June-July, Evolution has returned to MOM growth in daily average players so far in August, according to our tracker covering the ‘scalable games’. Moreover, we assume revenue growth support in H2e from key new game releases; and continued step-up of new dedicated Live tables (blackjack; not covered by our tracker) still boosted by pent-up demand among the online operators, Evolution’s customers.

Evolution (Buy, TP: SEK1700.00) - Returning to growth focus

We have upgraded to BUY (HOLD) on recent share price softness and likely continuing support from strong growth, while our SEK1,700 target price is intact. We forecast Q2 revenues up 94% YOY and EBITDA up 110% YOY (results due at 07:30 CET on 21 July), with the rollout of dedicated tables more than offsetting any slight negative effects from stay-at-home trend reversal.

Evolution (Hold, TP: SEK1700.00) - Signs of resilience

With three weeks left of Q2, we conclude that Evolution returned to MOM growth in daily average players in May and June-to-date, according to our tracker. While it is still early days for full re-openings in Europe, so far we have been unable to spot a reversal of the stay-at-home trend in Evolution’s player figures, which we find encouraging for the growth story ahead of the Q2 preview season.

Evolution (Hold, TP: SEK1700.00) - ‘D-Day’ for stay-at-home stocks

Our proprietary data tracker is showing a more volatile trend in the daily average number of players since mid-April. Our view is that we have highlighted the first leg of UK re-openings, and the results of our data indicate the increasing risk of how re-openings will affect Evolution’s player activity in the coming months.

Evolution (Hold, TP: SEK1700.00) - Comfort from growth acceleration

Following the striking Q1 results (EBITDA +150% YOY), we are positive on the outlook for more high-double-digit organic revenue growth and EBITDA-margin gains, reflecting the scalable business (new superior products and efficient studios, and synergies from the NetEnt and BTG acquisitions). The share-price outperformance causes us to maintain our HOLD, while our new target price of SEK1,700 (1,500) reflects our raised forecasts.

Evolution (Buy, TP: SEK1200.00) - Sustainable growth in H1 2021

Our proprietary data tracker shows 12% QOQ growth in Q1 for Evolution in terms of daily average players and 6% month-on-month growth so far in April, in line with the past 4-month average. The data indicates that Evolution’s strong organic revenue growth momentum has continued YTD, with the potential for further healthy QOQ organic revenue growth in 2021. We see slight upside potential to our estimates and consensus of c5% group organic revenue growth QOQ in Q1.

Evolution (Buy, TP: SEK1200.00) - Strong start to 2021 confirmed

Our proprietary data tracker shows >10% QOQ growth so far in Q1 for Evolution in terms of daily average players. Although our data does not account for player or games ARPU, it could provide an indication of player volume. In our view, this player volume growth indicates slight upside risk to our estimate and consensus of c5% group organic revenue growth QOQ in Q1.

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Evolution (Buy, TP: SEK1200.00) - Showing off profitable growth

We reiterate our BUY and have lifted our target price to SEK1,200 (990) on raised estimates and our positive view on near-term growth momentum (continued organic revenue growth QOQ) and profitable long-term expansion (new scalable games, studios and markets). We find it reassuring that Evolution, despite aiming for a 2021 EBITDA margin of 65%, repeated that growth should not be sacrificed over margins.

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Evolution (Buy, TP: SEK990.00) - Impressive January player growth

Our proprietary data tracker shows 5% month-on-month growth in January for Evolution in terms of daily average players. After a temporary slowdown post the busy Christmas/New-year period, growth has been notably strong in the last 10 days (9% week-on-week growth). The growth in January was equally driven by the games categories and skewed to the latter half of the month. We believe this supports our street-high view of continued QOQ organic revenue growth in 2021e.

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Evolution (Buy, TP: SEK990.00) - Securing an even stronger position

We have raised our organic revenue forecasts and included the NetEnt acquisition, prompting a 12% rise in our 2022e adj. EPS. Based on strong market trends and an improved position (acquisition, new games and studios), we expect the solid growth to continue. We have increased our target price to SEK990 (810), including a premium to the historical valuation (well justified in our view), and reiterate our BUY.

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Evolution (Buy, TP: SEK810.00) - Weekly player growth continues

Our proprietary data-tracker continues to show strong momentum for Evolution in terms of daily average players, which grew 6% week-on-week last week, according to our data. Moreover, this weekend, daily average players increased by c20% versus the weekend three weeks ago, boosted by Game Shows up 30% (Crazy Times +50%) and with impressive 14% growth in the key Roulette category. Growth is being driven by e.g. a structural tailwind (accelerating online penetration), superior games portfolio and s...

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Evolution (Buy, TP: SEK810.00) - Updated data-tracking (week 49)

Our new proprietary data-tracking tool continued to show strong growth momentum for Evolution’s games last week in terms of number of simultaneous players (average 4% week-on-week growth). Our peak-observation for the new hyped ‘Crazy Time’ gameshow stood out, with 24% more players week-on-week early on the Friday evening on 4 December. We believe the sequential growth in player numbers supports the growth case, and view it as a combination of a structural tailwind, superior product and seasonal...

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